Eland Philippines, Inc v.

Garcia

Before the SC, Eland seeks to attack the summary judgment rendered against it in an action to
quiet title.

Here, the SC rules in favor of Eland for 2 reasons:

(1) Eland’s defense of an existing Original Certificate of Title is a genuine issue of fact in an action
to quiet title.

(2) A review of the decree of registration would have been the appropriate remedy, instead of an
action for the quieting of title.

Facts

1. Background info: In an earlier Land Registration Case before the Tagaytay RTC, petitioner Eland
was already declared as the registered owner of the parcel of land in question. The ff happened:

 On June 7, 1994: the trial court “hereby approves the instant petition for land registration
and, thus, places under the operation of Act 141, Act 496 and/or PD 1529, otherwise known
as the Property Registration Law, the land described…in the name of the applicant ELAND
PHILIPPINES, INC.

Once the decision becomes final and executory, the corresponding decree of registration
shall forthwith issue”

 On Aug 20, 1997: a Decree of Registration was issued, pursuant to the RTC decision.

 Then, an Original Certificate of Title (OCT) was issued by the Register of Deeds, pursuant to
the Decree of Registration.

2. Less than a year since the Decree of Registration was issued—specifically on March 2, 1998—
Respondents Garcia filed a Complaint for Quieting of Title against Petitioner Eland.

This was filed before the same court that ruled in favor of Eland in the earlier land registration
proceeding.

Respondents’ claim:
 They are the owners, in fee simple title, of the parcel of land by occupation and possession
under Sec 48(b) of CA 141 as amended. They have been in continuous, public, and adverse
possession as owners of the said lot for at least 30 years.

 They are not aware that any person or entity has a legal or equitable interest in that parcel
of land. They only discovered that the land was the subject of the land registration
proceeding when they were requesting that the land be declared for tax purposes.

 Thus, because they were “not notified of the said Land Registration Case, they claim the
presence of misrepresentation amounting to actual or extrinsic fraud.”

 They also “alleged fraud in the substitution of their land with an area of 200k sq meters, for
an area of only 20k sq meters)  just mentioned in passing/ not explained.

3. Before the pre-trial conference, the RTC admitted Eland’s Answer Ad Cautelam.

First, petitioner-defendant made “Specific Denials”

 Petitioner denied that the land being referred to by plaintiff-respondent is the same land
that was the subject of the land registration proceeding
  Even if it was the same parcel of land, it was already adjudged with finality by the trial court
as absolutely owned by Eland.

Second, petitioner-defendant also raised special and affirmative defenses

 The complaint is barred by prior judgment in the Land Registration Case

 Others:
o The complaint is barred by the Statute of Limitation since the OCT had become
incontrovertible by virtue of Torrens System of Registration
o Plaintiffs are barred by their own omission from filing the present complaint under
the principle of estoppel and laches. Plaintiffs slept on their rights because up to
present, they still do not have a certificate of title covering the land; while
defendants obtained a final judgment
o Plaintiffs do not come to the Court with clean hands because they appear to be
well aware of the proceedings in the Land Registration Case

4. Eventually, on Aug 9, 1999, respondents Garcia filed a Motion for Summary Judgment.

 The motion was set for hearing on Aug 20, 1999—10 days from the filing.

 Respondents Garcia furnished petitioner-defendant Eland with a copy of the motion, on

the same day it was filed.

5. The trial court granted the motion, and ruled in favor of the respondents, declaring that the
plaintiffs (respondents Garcia) are the absolute owners and rightful possessors of the parcel of land.

When petitioners appealed to CA, CA affirmed the RTC and dismissed the appeal.

Hence, this petition. Here, SC rules in favor of Eland.

Non-main Issues

WON the 10-day notice rule/ due process was violated – NO

• According to Eland, the 10-day notice rule is that (1) a motion for summary judgment must be
served at least 10 days before the date set for hearing, and that (2) a hearing must be held to hear
the parties on the propriety of a summary judgment.

• According to Eland, this rule was violated because the (1) motion for summary judgment was
served only on Aug 20, 1999—the same day it was set for hearing, and because (2) no hearing was
conducted on Aug 20 because the RTC instead ordered petitioner to submit its
comment/opposition.

• SC: there is substantial compliance with due process.

 The registry receipt shows that the motion for summary judgment was filed on Aug 9—TEN
DAYS before the set hearing.

 Petitioner was furnished with a copy of the motion on the same day it was filed.

 Even if there is no hearing, due process does not always and in all situations contemplate a
trial-type proceeding. The essence is in reasonable opportunity to be heard and submit
one’s evidence in support of his defense.

WON summary judgment is proper in an action for quieting of title—YES

• According to Eland, a summary judgment is not available for quieting of title because a summary
judgment is available only to a claimant seeking to recover upon a claim, a counterclaim, a cross-
claim, or to obtain a declaratory relief.
• SC: The SC has already ruled that ANY action can be the subject of a summary judgment. The
SOLE exceptions are actions for annulment of marriage, or for declaration of its nullity, or for legal
separation.

Two Main Issues

WON a genuine issue of fact exists—YES.

Eland’s defense of the OCT is a genuine issue of fact. It is material to the second requisite for an
action to quiet title to prosper.

• Rule: Summary judgment

 A summary judgment is permitted ONLY if there is NO genuine issue as to any material fact.
o ALTHOUGH the pleadings, on their face, appear to raise issues, but IF the affidavits,
depositions, and admissions presented by the moving party show that such issues
are not genuine, THEN there is a non-existence of a genuine issue.

o A “genuine issue” is an issue of fact that requires the presentation of evidence, as

distinguished from a sham, fictitious, contrived, or false claim.

 It is the movant who has the burden of proving the the non-existence of a genuine issue.

• Rule: Action to quiet title

Because the summary judgment is made on an action for quieting of title, the SC also explains the
rules on an action for quieting of title

 It is essentially a common law remedy grounded on equity

 Art 476 of the New Civil Code provides that whenever there is a cloud cast on
complainant’s title to or interest in a real property (by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid or effective, but is in truth
and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said
title), then an action may be brought to remove such cloud, or to quiet the title.

The action may also be brought to prevent a cloud from being cast.

 Taking this, there are 2 indispensable requisites for an action to quiet title to prosper:
o (1) the plaintiff or complainant has legal or an equitable title to or interest in the real
property

o (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on

his title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.

• Application: The first requisite is satisfied. In their complaint, respondents claim that they have
become the owners in fee-simple title of the land by occupation and possession under the
amended CA 141.

• Application: However, through Eland’s Answer Ad Cautelam, it was able to duly dispute the
Garcia’s claims regarding the second requisite.

 Eland raised special and affirmative defenses in its Answer Ad Cautelam. One of which is
the prior judgment which led to the OCT.

That the Garcias seek to nullify Eland’s Original Certificate of Title “is already a clear
indicium that a genuine issue of material fact exists”
  When a fact as pleaded by plaintiff is disputed by defendant, proceedings for summary
judgment cannot take the place of a trial.

• Moreover, by granting the summary judgment, the trial court has in effect annulled its former ruling
based on a claim of possession and ownership of the same land for more than 30 years without the
benefit of a full-blown trial.

• CONCLUSION: The respondents failed to discharge their burden of proving the non-existence of
a genuine issue fact of fact. On the contrary, Eland was able to duly dispute respondents’ claim
over the second requisite of an action to quiet title—Eland’s defense of the OCT is a genuine issue
of fact.

WON an action for the quieting of title is the proper remedy—NO.

Because the 1-year period before the Torrens title becomes indefeasible and incontrovertible has
NOT yet expired, then a review of the decree of registration would have been the appropriate
remedy.

• Rule: An important feature of a certificate of title obtained under the Torrens system is its finality

 The proceedings, where the certificate of title is obtained, is directed against all persons—
known or unknown, whether actually served with notice or not, and includes all who have
an interest in the land.

 If such entities with an interest in the land do not appear and oppose the registration of
their own estate or interest in the name of another, then judgment is rendered against them
by default. Such judgment is conclusive, in the absence of fraud.

• Rule: HOWEVER, courts may reopen proceedings already closed by final decision or decree IF an
aggrieved person has a (1) sole claim of actual fraud, AND (2) the period of 1 year after the date
of entry of the Decree of Registration has not yet elapsed. This can be done via a review of decree
of registration.

The ff. are the requisites of a Review of Decree of Registration, from Sec 32 of PD 1529 (Property
Registration Decree)

 (1) petitioner must have an estate or interest in the land

 (2) he must show actual fraud in the procurement of the decree of registration

 (3) the petition must be filed “not later than one year from and after the date of entry of
such decree of registration”
o In Rivera v. Moran, it was clarified by the SC that a complaining party does not have
to wait until the final decree is entered, because there seems to be no reason for
that. Rather, the petition may be filed at any time after the rendition of the court’s
decision; all that the provision intends is that it is filed before the expiration of one
year from the entry of the final decree of registration.

 (4) the property has not yet passed to an innocent purchaser for value

• Rule: A petition for review of decree of registration under Sec 32 is a remedy that is separate and
distinct from a motion for new trial
 The remedy under Sec 32 is not affected by the denial of the motion for new trial,
irrespective of the grounds upon which it may have been presented.

• Rule: After the one-year period, the decree of registration and the certificate of title issued shall
become incontrovertible.
When this happens, the remedy of an aggrieved person may be an action for damages against
the applicant or any person responsible for the fraud.

• Application: It is clear from the facts that the 1-year period before a Torrens title becomes
indefeasible and incontrovertible has NOT yet expired.

 Recall from the facts that the decree of registration was issued on Aug 20, 1997. While the
complaint for quieting of title was filed on March 9, 1998.

• CONCLUSION: Because the 1-year period has not yet expired, the appropriate remedy would
have been a review of the decree of registration.

Disposition

CA Decision is reversed. Tagaytay RTC Decision is null and void.